Feds: Kaloyeros should serve 'substantial term of imprisonment'

Ex-SUNY Poly chief asks for less than year in bid-rigging case

Seth WenigFederal prosecutors have asked a federal judge in Manhattan to sentence SUNY Polytechnic Institute founder Alain Kaloyeros to a "substantial term of imprisonment" but below sentence guidelines that could put him away for up to 14 years.

Philip KamrassClick through the slideshow to see the people indicted in the Buffalo Billion scandal.

Alain E. Kaloyeros, senior vice president and chief executive officer, College of Nanoscale Science and Engineering, resigned after being charged in September 2016 with wire fraud. Kaloyeros and three business executives were convicted in July 2018 of federal criminal charges for rigging bids on state contracts worth more than $850 million. He is to be sentenced Dec. 11.

Associated Press/Mark LennihanJoseph Percoco, formerly Gov. Andrew Cuomo's top aide,was found guilty of corruption in March 2018 for taking $320,000 in bribes in two schemes. He was sentenced in September to 6 years in federal prison. Percoco is to report to federal prison Dec. 28, 2018. His ties with the Cuomo family date back to his work for the late Gov. Mario M. Cuomo.

Will Waldron

Todd Howe was a longtime Cuomo friend who in September 2016 pleaded guilty to eight felonies, including several related to his role of bagman in schemes involving the exchange of cash from developers in exchange for official favors from former top gubernatorial aide Joe Percoco. In the weeks before the Percoco trial, it came to light that Howe tried to improperly recover the cost of a fancy Manhattan hotel room from a credit card company after signing an agreement not to commit any more crimes. Howe was sentenced to five years of probation in April 2019.

Mark Lennihan

Peter Galbraith Kelly Jr., who is known as "Braith," a former executive with Competitive Power Ventures Holdings, a Connecticut company pleaded guilty on May 11, 2018, to conspiracy to commit wire fraud. He admitted to defrauding CPV by misrepresenting that Percoco had obtained state ethics approval for his wife to work at CPV.

NEW YORK — Federal prosecutors have asked a federal judge to sentence SUNY Polytechnic Institute founder Alain Kaloyeros to a "substantial term of imprisonment" after his conviction last summer on bid-rigging charges.

Prosecutors, however, asked for a sentence below the 14 years Kaloyeros could receive under federal guidelines.

Kaloyeros, 62, escaped war-torn Lebanon for America and rose to became the face of the nanotechnology industry in the Capital Region and, later, throughout upstate New York. Formerly one of the highest-compensated public employees in the state, he's scheduled to be sentenced Dec. 11 after being convicted on all counts in one of two trials resulting from the federal investigation into the state's "Buffalo Billion" development efforts.

A federal jury in Manhattan determined in July that Kaloyeros rigged bids on state contracts worth more than $850 million that were part of Gov. Andrew Cuomo's initiative, which was intended to revive the economies of western and central upstate New York.

The contracts were awarded to COR Development in Syracuse and LPCiminelli in Buffalo, outfits that prosecutors were able to prove at trial had been favored. Kaloyeros as well as Louis Ciminelli, the owner of LPCiminelli, and COR Development executives Steve Aiello and Joseph Gerardi were all convicted of wire fraud and wire fraud conspiracy. Gerardi, COR's general counsel, was additionally found guilty of lying to federal investigators.

"Kaloyeros abused a position of great power and public trust, and did so in order to curry favor with a lobbyist and with the governor of New York — all in an effort to guarantee his position of prestige and authority," stated a memo submitted Monday by prosecutors with the Manhattan U.S. Attorney's office.

Under federal sentencing guidelines, Kaloyeros would face a term of between 11 1/4 years to 14 years. In their memo, prosecutors showed a degree of leniency for the physicist, who at trial they described as having been motivated by "power and hubris," and the fear of losing his lofty position at the school he founded.

"The government respectfully submits that the defendant should be sentenced principally to a substantial term of imprisonment," the memo stated, adding that "a sentence below the applicable guidelines range is warranted in this case."

Attorneys for Kaloyeros asked U.S. District Court Judge Valerie Caproni to impose a sentence of no more than four to 10 months.

Also submitted to Caproni were dozens of letters seeking leniency for Kaloyeros — from his family and former SUNY Poly associates as well as Capitol figures such as former New York Post political columnist and editor Fred Dicker, who praised Kaloyeros as "the single most creative and impressive force for the regeneration of Upstate New York's sadly deteriorated economy."

David Catalfamo, a Republican political consultant and former aide to Gov. George Pataki, wrote to Caproni that Kaloyeros' contributions to the state and the Capital Region in particular were "profound."

"Through the years, he helped to transform the economy of the region, making it the epicenter of nanotechnology research and development in the world," Catalfamo wrote.

In their memo to the judge, defense attorneys said Kaloyeros had overcome having a father who was "an abusive alcoholic who brutalized his family," and whose rages sent his wife to the hospital on multiple occasions.

"When Alain was lucky, his father's drinking spells would end in prolonged absences from the family — wreaking havoc on their finances," the memo said. "When Alain was unlucky, his father's drinking spells led to violent abuse."

"Alain Kaloyeros is a good man. He is a loving and devoted father, educator and friend," stated the letter from Kaloyeros' defense team. "He is also an exceptionally talented nanotechnology researcher. Alain's hard work, perseverance and integrity earned the respect and admiration of countless colleagues throughout higher education from students to campus staff to fellow researchers to CEOs."

The memo noted that Kaloyeros derived no personal financial gain from the crime and argued it was aimed at improving the school's mission.

"He has lost his career and his income," his lawyers stated. "He is not a danger to society and his conviction has already sent a powerful message throughout the state."

At trial, prosecutors presented evidence showing that in September 2013, Kaloyeros "cooked" a supposedly open and fair bidding process. Kaloyeros allowed the LPCiminelli and COR Development executives to have advance copies of requests for proposals (RFPs) that were to be put out by the Fort Schuyler Management Corp., a nonprofit arm of SUNY Poly that approved the contracts.

A month later, Fort Schuyler put out RFPs seeking developers for non-specific SUNY Poly-related projects in Syracuse and Buffalo. COR submitted its bid for the Syracuse-area RFP on Nov. 7, 2013; LPCiminelli sent its bid for the Buffalo RFP on Dec. 10, 2013.

The Buffalo RFP required applicants to have at least 50 years of experience in the area, a prerequisite that prosecutors said have been custom-tailored to favor LPCiminelli. The RFP was later changed to require 15 years after Ciminelli became fearful it would expose the bid-rigging.

Kaloyeros' trial came three months after another jury convicted former top Cuomo aide Joe Percoco of taking bribes in exchange for official favors. Percoco was sentenced in September to six years in prison.

Ciminelli and COR's Gerardi are scheduled to be sentenced Nov. 28 and Dec. 6, respectively. Aiello, convicted in both trials, will be sentenced Nov. 29.

Todd Howe, the consultant who connected the players in both sets of schemes and served as a key prosecution witness at Percoco's trial, is slated to be sentenced early next year.